New Shell energy report -- a little too close to the truth?

Paul Mobbs mobbsey at
Wed Feb 16 18:14:59 GMT 2011

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If you want to read the Shell's report, "Signals and Signposts: Shell enery 
Scenarios to 2050", it's here -- 

I think my favourite line is, "The dramatic deterioration in fiscal policy in 
most advanced economies will render monetary policy improvements insufficient to 
safeguard macroeconomic stability.". Or, to translate from econo-speak, high 
prices are going to stuff the economy (well, as it currently exists).

So, reading between the lines, find a new economic model before the wheels 
completely fall of the old one.

I've appended Steve Levine's take below.


The coming misery that Big Oil discusses behind closed doors

Steve LeVine, The Oil and the Glory Monday, February 14, 2011

When big-thinkers at companies with the most skin in the energy game are 
behind closed doors and they discuss how the world really looks going forward, 
do they say that there are bumps in the road but that things will be fine, just 
fine, as they suggest publicly? Three years ago, we got a glimpse into the room 
when Royal Dutch/Shell issued a scenario forecasting the world in 2020. Based 
on current economic and energy-use patterns around the world, Shell said that 
energy supplies will be so tight that they will tip the world into a full-
blown crisis in which governments will force their populations to reduce 
driving, use less electricity, and pay an extremely steep increase for what 
they do consume. There will be a massive, decade-long economic slowdown, and 
geopolitical power will shift dramatically to energy-producing nations, the 
company said.

Today, Shell returned with an update. The company said that the 2008 financial 
crisis interrupted the slide it predicted, but that the clock has begun 
ticking again. If the world does not change how it uses energy, its scenario 
will hold true.

In recent weeks, we've heard almost identical energy-consumption projections 
from ExxonMobil (here is Exxon's neat slide show), BP and now Shell: The world 
will use about 40 percent more energy by 2030. The difference is that Exxon and 
BP more or less just toss out the numbers, while Shell suggests that one might 
consider running for the hills, oh, sometime around 2016 or 2017 before 
everyone else shows up. You all can plan to return home around 2030, Shell has 
said, when the world has come to its senses and adopted all the efficiency and 
price-signal mechanisms that some forward-thinkers are suggesting now.

There is some optimism in the report, such as descriptions of actions by 
nations like Japan and Norway and companies like Wal-Mart to lower greenhouse 
gas emissions. But the United States, for example, has not reversed energy-use 
practices that helped lead to the Shell scenario, the company says.  

I myself tend to believe that, although it looks otherwise at the moment, 
nations will not put themselves in the collective position of unhappiness 
described by Shell. For example, there will be an even greater than projected 
shift to plentiful natural gas, thus tempering Shell's projections. Yet, it's 
worth reading on to the jump for more about the reports. Meanwhile, for the 
visual-minded, here is Shell's glossy video presentation. 

Shell's 2008 and 2011 reports actually contain two scenarios. The one 
described above, called "Scramble," is what it projects will happen if the 
world continues on its current course. A more optimistic version, called 
"Blueprints," includes a squeeze but far less despair because the world acts 
to reduce energy consumption and CO2 emissions.

Shell's latest, 78-page report confirms its previous finding that in just four 
years, our usual sources of fuel are not going to meet growing global demand, 
so that there is going to be much switching to dirty coal, plus more use of 
agricultural-based biofuels.

Specifically, Shell foresees total energy demand -- including fuel for 
transportation, manufacturing, electricity, heat, and so on -- rising to the 
equivalent of about 317 million barrels of oil a day, about 22 percent higher 
than the approximately 259 million barrels a day consumed last year. In 2030, 
the number rises another 12 percent, to 358 million barrels a day, in Shell's 

As the earlier report described what happens next, that's not going to be 
enough energy either, so:

"governments react with draconian measures -- such as steep and sudden 
domestic price rises or severe restrictions on personal mobility with 
accompanying disruptions in value chains and significant economic dislocations. 
By 2020, the repetition of this volatile three-step pattern in many areas of 
the energy economy results in a temporary global economic slowdown. ... 
Although change must and does occur, the turnaround takes a decade because 
large-scale transformations of the energy system are required."

The 2008 report was also interesting in describing the geopolitical result -- 
that "major resource holders are increasingly the rule makers rather than the 
rule takers. They use their growing prominence in the world to influence 
international policies, particularly when it comes to matters they insist are 
internal such as human rights and democratic governance." In other words, no 
Egypts or Tunisias in the scarce-energy age. No one will object, Shell said, 
because they will need sweetheart deals with the energy-producing countries in 
order to obtain what they can and "do not want to rock the energy boat they 
have just managed to board."

The new report suggests that all is not lost -- there are signs, if slow ones, 
of attention to climate change. Whatever the case, Shell sticks with its 
prediction that eventually -- after about a decade of misery -- people come 
around and decide to act:

"High domestic prices and exceptionally demanding standards imposed by 
governments provoke significant advances in energy efficiency. Eventually, 
locally developed alternative supplies -- biofuels, wind, and thermal solar -- 
also contribute on a much greater scale than before. By 2030, healthy economic 
growth is restored, with particular vibrancy in the new energy sector that has 
received a massive stimulus to innovation through this difficult period."

- -- 


"We are not for names, nor men, nor titles of Government,
nor are we for this party nor against the other but we are
for justice and mercy and truth and peace and true freedom,
that these may be exalted in our nation, and that goodness,
righteousness, meekness, temperance, peace and unity with
God, and with one another, that these things may abound."
(Edward Burrough, 1659 - from 'Quaker Faith and Practice')

Paul's book, "Energy Beyond Oil", is out now!
For details see

Read my 'essay' weblog, "Ecolonomics", at:

Paul Mobbs, Mobbs' Environmental Investigations
3 Grosvenor Road, Banbury OX16 5HN, England
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